Gumi Said to Plan Japan IPO at $1 Billion Valuation

By Takahiko Hyuga -
Jul 9, 2014

Gumi Inc., a Japanese developer of
mobile games, plans an initial public offering as soon as this
year that may value the company at about 100 billion yen ($1
billion), people with knowledge of the matter said.

The company plans to submit a listing application to the
Tokyo bourse as soon as August and sell shares as early as
December, the people said, asking not to be identified as the
deliberations are private. Gumi is working with Nomura Holdings
Inc. (8604) on the offering, according to the people.

Gumi, which makes role-playing games including “Brave
Frontier” and “Genjuhime Monster Princess,” would add to the
$6.7 billion companies raised through IPOs in Japan this year,
according to data compiled by Bloomberg. It’s seeking to list
after Japan went from being the best performing major stock
market in 2013 to the worst this year, the data show.

The company plans to list on the Tokyo Stock Exchange’s top
board, known as the First Section, according to the people. The
First Section records higher levels of trading by foreign
investors and has stricter listing requirements, according to
the bourse operator’s website. Japanese game developers Gree (3632)
Inc., DeNA Co. (2432) and Colopl Inc. (3668) first listed on the Mothers
market for smaller companies and later upgraded their listings
to the First Section.

Gree, Jafco

Gumi employs about 800 staff and has subsidiaries in South
Korea, Singapore, China, France and the U.S., according to the
company’s website. Its investors include Jafco Co. (8595), the nation’s
biggest venture-capital firm, as well as Gree, Mitsubishi UFJ
Capital Co. and Development Bank of Japan Inc.’s investment
unit, the website shows.

Shares of Gree rose as much as 4.3 percent, the biggest
intraday gain in six weeks, and traded 0.4 percent higher at the
lunch break in Tokyo. Jafco slipped 0.3 percent after climbing
as much as 2.3 percent. The benchmark Topix (TPX) dropped 0.5 percent.

Representatives for Gumi couldn’t be reached after several
calls to the company’s office in Tokyo. Kenji Yamashita, a
Tokyo-based spokesman for Nomura, declined to comment.

Chief Executive Officer Hironao Kunimitsu, who founded Gumi
in 2007, spent 10 years traveling after he graduated from high
school and visited more than 30 countries including China, India
and the U.S., according to the company’s website. Gumi now earns
more revenue overseas than it does from the domestic market,
Kunimitsu wrote in a July 4 blog post.

IPO Outlook

The company raised 5 billion yen in its latest round of
funding from investors including Gree and Jafco, according to a
July 4 statement on its website.

First-time share sales in Japan will almost double to 1
trillion yen this year, Hiroshi Yoshihara, head of the IPO
department at Tokyo-based Nomura, said in a January interview.
As many as 80 companies in industries such as information
technology, manufacturing and solar energy may list, up from 58
in 2013, according to Yoshihara.

Line Corp., operator of Japan’s most popular mobile
messaging app, is working with Nomura and Morgan Stanley (MS) to
prepare for an IPO as soon as November, people familiar with the
matter said in June. The company may seek a market value of more
than 1 trillion yen and is considering listing on the Tokyo
Stock Exchange and either the New York Exchange or Nasdaq,
according to the people.

Recruit Holdings Co., a Japanese provider of staffing
services, plans a first-time share sale on the Tokyo Stock
Exchange as soon as October, people with knowledge of the matter
said in May.